Wednesday, June 10, 2009
Government Motors but Dammed Detroitosaurus can still Disco !
THE demise of GM had been expected for so long that when it finally died there was barely a whimper. Wall Street was unmoved. Congress did not draw breath. America shrugged. Yet the indifference with which the news was received should not obscure its importance. A company which once sold half the cars in America, employed in its various guises as many people as the combined populations of Nevada and Delaware and was regarded as a model for managers all over the world has just gone under; and its collapse holds important lessons about management, about government and about the future of the car industry.
"Managing Culture is our main Business" was said by the most famous 1990s American Manager who penned "Who Say Elephants Cant Dance" ? For starters he saved an American icon which is curently OnDemand. Now they are Thinking of a Smarter Planet. Not only did Big Blue change the rules of business engagement, they exited some head ache loss making businesses. Even those which were core to their identity like the PC and other hardware business.
Today more than a third of their business profitability comes from Software business and their over all business sweetly rewamped in a portfolio of annuity business. Now that was transformational.
Apple shrugged the looming online music piracy bane and converted into a billon dollar rainmaking cash cow ! the apple story is outstanding in context as Apple II is all about music sales as much as it is about computers. And guess what the Computer in Apple Computer got dropped last year. The Personal Computers from the IBM PC got sold to lenovo.
May be GM should let go sales of cars with its badge and focus as a contract manufacturer , Supply chain management company globalised in operations and service hub fueling next generation cars with bio fuels and brainy rechargable batteries. That'll create more jobs and avoid the legendary plants at Detroit and Delaware from being shut !
Now that a huge ego issue for America .isnt it ? Thats is a cultural issue in as much as it is a ego hassle. So we expect a lot from the "New Government Motors"
For several decades or so it seems that GM was a victim of the industrial megalomania and corporate nar⋅cis⋅sism that self consumed the gaint with inefficient , gas guzzling , American ego fueling , SUV's ( Super Useless Vehicles). When the nimble footed japanese and quality focused germans and super fast Koreans hit the fast lane , they not only came up with smart cars but lean ones too , mean performance, quality and value for money and light on pocket & light on environment four wheelers!
When times changed the GM think tanks also tried to shrugg of the SUV mistep. But the GM culture was deep and cancerous. Now lean and mean with half its original line up , they are better positioned to adopt Kaizen principles ! Look for Blue Oceans and Compete into the future.
With Hummer going going gone under the hammer and saturn, saab and pontiac eclipsed the new GM can drive with green Cadillac, Chevy,Buick and GMC mostly on Indian and Chinese roads more than at Mountain View.
Art of unlearning the Alfred Sloan legacy will be tough. What got GM here wont get New GM there ! Chevy Volte is a spec of possibility on a road long captured by Toyota's Prius and other hybrids.They need to take a leaf from guys at www.betterplace.com as the world needs a betterplace.
Recreating a industry model like the thought behind "betterplace" can be a market making endevour. An Ode to Ford and study of the beasts from the east like
Tata's "nano" is still very much plausible !
But then culture vultures needs to be in sync with the necciated dictats of what the individual customer can afford in these times of recession and future fossil fuel independency. Be it biting cold or blazing sun , the billions in India and China will buy more cars than the whole world put togather in the next five years.
If markets are shifting then why not shift the corporate strategy, people strategy , design strategy , execution strategy and management strategy. Why not make culture the key strategy !
"When the rate of change outside the organisation is greater than the rate of change inside the organisation then the end is in sight" - Yes we sighted the Chapter 11 end. Now for a new start ! GM Redux will depend on the following points :-
Fritz Henderson must get this guy "Shai Agassi" on the Board along with "Ratan Tata" and Edward Whitacre, Jr. as Chairman of New GM not such a great idea.He already sit on the heavy weight Exxon board and he builds a New GM running on fuel cells and solar power. Conficting isnt it ? AT&T is also such a dusty legacy right?
Even as we tune into twitter and facebook for the re:invention of the New GM a few glaring and uncomfortable questions around cultural transformations remain. Its about execution like the Big Blue did and reinvention like Mark Hurd HP has !
The political time window is the next 3 years or further 4 more if Obama lasts another term unscathed from the global recession.
New GM need to fit in the new global economic architecture integrating the Americas, Dragon Land , Land of Raising Sun , EU and BRIC walls .
Assuming that Capitol Hill and Unions stay subtle at management interventions and management swift to external changes!Government Motors is Dammed but Detroitosaurus can Disco ! IF Only ............................................
Before it too late ..Henderson catch hold of the "The LongTail Pipe" ( The Green phrophet Shai Agassi Blog" | http://shaiagassi.typepad.com/the_long_tailpipe/ |
And more as yours truly will add to cement some points and perspective to put them in meaningful context ..stay glued !